When you’re shopping for a car loan to finance a new vehicle, it can be overwhelming trying to understand all of the associated financial factors. How much to shell out for a down payment, how much tax and interest you’ll pay, and what your payments will come to each month are all elements that come into play when taking out a car loan in Canada. When trying to finalize a purchase, the last thing you want is a surprise when you see your monthly payment amount.
To explore financing options that make sense for you, try an online car loan calculator. These convenient online tools allow you to weigh the deciding factors when shopping for a deal that suits your lifestyle and budget. Knowing ahead of time how much to expect to pay on your auto financing makes the process smoother and much less intimidating. That means less time deciphering confusing financing terms and more time shopping for an exciting new ride you can afford.
What Is A Car Loan Calculator?
A car loan calculator is an online tool that allows you to enter amounts related to auto financing to receive estimates on your expected payments, whether monthly, weekly, or bi-weekly. By entering basic information on your financial picture, the car finance calculator will produce practical results on how much you can expect to pay over the life of your auto financing loan.

LendingArch’s simple, easy-to-use car loan form is designed to empower Canadians shopping for car loans with practical, realistic information on how financing is calculated, even before they contact a dealer. Try it out and make predicting your financing future a lot clearer, with no unwanted surprises.
How Are Car Loan Quotes Calculated In Canada?
For most consumers, buying a car will require financing in the form of a loan. Few buyers have the cash on hand to pay for the total price outright, even with an existing trade-in. To buy a new or used car, most buyers turn to auto loan lenders for financing on their purchases. Auto loans generally function just like any personal loan. The creditor lends you the principal amount; in this case, the cost of the car. You then pay the creditor back over time via monthly installments, plus interest, until the loan is paid. However, there are factors specific to auto financing that should be accounted for when shopping for a loan. Using a car loan calculator is a handy way to easily do the tricky math of estimating the monthly payments you’ll pay on your loan.
Many details are weighed in calculating car loan quotes, most prominently the total vehicle price, including any sales taxes. Along with these basic elements, there are other issues specific to calculating auto loan quotes, including:
Interest Rates
The interest rate applied to your loan will be determined by a rate outlined during the pre-qualification process or based on estimated rates reflecting larger trends nationwide. Your credit history, as well as your income and other financial details, often factors into the rate you’ll receive from a lender. Rates can start as low as 0% for new vehicles and vary wildly among dealers who are always offering hot deals.
Loan Term
Auto loans most commonly have 36-month terms, but depending upon your lender and their assessment of your financial picture, your loan may come with a longer or shorter term. Using a loan calculator, you can easily see how extending or condensing the length of the loan can affect your monthly payment.

Amortization
It’s also important to know that auto loans are amortizing. Amortization means that the principal and interest are paid down (or amortized) in equal payments over the life of the loan. The monthly payments will remain the same, though the proportion of interest in relation to the principal will shift over the course of the loan. The car loan calculator will reflect this aspect of the loan in its determination of monthly payments.
Dealer Fees, Rebates, or Incentives
Auto dealers are always announcing special financing offers, including rebates or other incentives, to bring in customers. These may or may not be reflected in the amounts provided by a loan calculator. Keep any extra specifics in mind when weighing your payment plan!
A car loan payment calculator will help you understand how each of these factors affects the resulting payment rate. This will give you a clear picture of what to expect as you move forward in securing auto loan financing.